Home Depota firm dedicated to construction materials and household items, has left a warning sign for the real estate sector. The thing is that the company has left a cautious preliminary forecast for next yearwhich indicates that no improvement is expected in the short term for the aforementioned sectOr Según Kang in Yahoo Finance.
The company expects that the Comparable sales growth remains stable or even increase a 2% during the year, below the average of estimates compiled by Bloomberg. Comparable sales are a key indicator of industry performance. Home Depot also presented total sales growth projections below estimates.
The US housing market has affected Home Depot, as high interest rates They have forced consumers to stay away from major purchases and projects that require financing. While mortgage rates are lower than a year ago, Americans have been wary of rising costs across the economy. House prices also remain high, meaning housing has become more unaffordable for a large portion of the population.
Home Depot, which will host an investor day with analysts this Tuesday, also presented a case of «market recovery» which anticipates further growth when the company sees an uptick in housing activity and spending. In such a scenario, comparable sales are expected to increase between 4% and 5%.
«We believe that the pressures in the real estate sector will correct themselves and provide the home improvement market with support for faster growth than the broader economy,» stated the CFO, Richard McPhailin the statement. He added that Home Depot hopes to «continue to grow faster than our market.»
In its latest earnings report, Home Depot indicated that the expected rebound in demand had not materialized, causing its stock to decline. The stock has fallen a 10% so far this year through Monday’s close, compared with a gain of 16% of the index S&P 500. The firm was down 0.8% in pre-market trading on Tuesday.
Home Depot’s results contrast with those of other large retailers such as Walmartwhich have maintained their growth despite the difficulties in the US.
During the current downturn in results, Atlanta-based Home Depot has boosted its online offerings and expanded its business to serve professional contractors, who tend to spend more than do-it-yourself customers.
The company maintained its guidance for fiscal 2025.
Home Depot It is trading higher on Tuesday afternoon at $353.44. The 200-period moving average is below the candlesticks of the last thirty days, RSI is up at 45 points and the MACD lines are below the zero level.
Medium-term resistance is at $426.46. Meanwhile, Ei indicators are mixed.